DHL Group CEO Tobias Meyer Talks Trump Tariffs & Global Trade

Bloomberg Audio Studios, podcasts, radio news, our companies, how our banks? How are consumers positioning ahead of what may be a pretty volatile second term for Donald Trump. We've got the perfect guest to talk about just that. Tobias, my DHL Group's CEO, is in London just to see us, I'm told, joins us around the table. Tobias, a pleasure to have you on the program. Walk us through kind of this positioning story around Donald Trump.

What are you hearing?

Are people worried? Are you seeing that show up in the.

Likes of some of the flows, Well, definitely, I mean it's a big topic. I was in South America just two weeks ago for an entire week in Mexico.

In Brazil, in Colombia as.

Well, and especially the Mexican economy being so closely tied to the US, it's a big topic. What will happen also amongst our customers. We have supply chains, they are being closely integrated, a lot of parts coming from Mexico into plants in the US as well, so there's concern

Is any evidence that people are front running the terraces? Are you seeing any stock built coming through? Maybe in the States.

Hard to say, but there's a good volume in the last weeks. We see that in ocean freight, We see that in their freight. The year has been quite volatile. We had very strong exports out of China for many weeks on the ocean freight side especially, so strong growth there, but it has been volatile, so it's hard to call out whether there's really a strong element of that.

Now you mentioned the South American aspect as well. Part of the Trump trade has been an expectation or a ramp up of this frond shoring dynamic. Is there evidence of that? I felt like in the first Trump administration that was kind of put on pause. Could you see that restart?

Well? Definitely.

As it relates to Mexico, I do think we see, for a variety of reasons that this diversification of the supply chain that has been taught about, which for Mexico and the US, means also some near shoring.

I think for the rest of the world, this is quite different.

We see more things shifting to Southeast Asia, but we've also seen customers putting production back into China, recognizing that this is the market where the supply chain is the deepest, the capacity is the largest, and many people still think that the next thing after China is China when it comes to manufacturing.

I mean, you're based in Europe. When we're talking about trade under Donald Trump, how do you think that Europe's going to retaliate? I was going to say, negotiate. What are you planning for?

Well, that's a good question.

I think twenty twenty five is a year where the scenarios are unusually wide apart. You could definitely see a good scenario where indications out of the US continued investments along with IRA for instance, some tax relief elections in Europe that lead to stable goments that could influence confidence quite positively. But on the other hand, there is the scenario where support to Ukraine might not continue. That then weighing on confidence in Europe and tariffs coming into play.

There's a hard question I want to ask you. I mean, it's about the sad news of that plane crash, the DHL cargo plane crash near the Lithuanian capital. I know that a crew member died, three others were injured. I really wonder whether it's responsible to be using planes that first entered service in nineteen ninety three.

That's that's older than critic Well, honestly, I don't think that is a problem. Our thoughts are with a family of the deceased, Parlod and the crew members that are still in hospital. But operating such aircraft safely is something that the industry has learned over many years. I'm an aviation engineer myself, and I find it close to a miracle the safety standards that.

We have achieved in aviation.

If you compare this, particularly what we see in terms of road transport, if you look at markets like India where we now have a six digit number of dead people on the road. So it is a very tragic event, and you're.

Not worried about the safety of the fleet.

No, I'm not worried about the safety of the fleet. The aviation industry has over many decades continued to lift the standards address new challenges of different kinds, taking the right conclusion also from technical failures that we've.

Seen in the past.

So I think this industry really has a very good track record as it relates to safety.

You get the aircraft he wants out of Seattle. I think if you use an airline in a way, and when I talk to the airline bosses that I often talk to, they tell me they're not getting the airplanes they need out of Seattle.

Is that a for you as well?

So, yes, we still have some trouble seven aircraft freighters. We use new from the line aircraft, particularly on the intercontinental lanes. Also because of sustainability reasons, we want to have the most efficient asset to burn as little fuel as possible for the cargo that we transport.

So that's very important to us.

And we have initiated a new build program several years ago and we're still waiting for some aircraft. And we do see that the lack of deliveries is causing issues.

So one of the issues that Bensmith and that France is flagging that his maintenance costs are significantly high. Are you having that same issue?

Well, we all need to still fly all that aircraft also on intercontinental roots. That's not good for fuel burn and that's not good for maintenance as well.

So in terms of the margin that is that is that a margin impact?

I think for us it's Look, we operate a fleet of roughly three hundred units, so we're lacking a single digit number, so I can't.

See that as a huge driver.

But it's definitely more than an annoyance, more than an annoyance.

Okay, well, purely that's the perfect segue almost to maybe something a little bit closer to home, and that is the German election coming up in February. Tobias, I'm not going to ask you what you think of the politics, but I am curious how it affects your business, and especially when things like corporate taxation are something that could very fundamentally change the bottom line of your company.

Well, I mean we are now predominated in the national company. The great majority of our revenue is outside Germany.

It still affects us.

We are the universal service provide US that relates to the postal system, so we'll help with the ballots with the male elections.

That's a big topic.

For us, that we're well set up to do that in February when voters hit for the polls in Germany. I think what is very important for Europe is to see a stable government that we get out of this situation. That is not only now the case in Germany, but we see this in France with theis in the Netherlands, for instance, in Belgium, that we get into a setting again where we have solid governments with strong majorities or good majorities in their parliaments, and that we see politics moving forward.

Are you suffering from just in terms of one of the fact is that the politics is interacting with at the moment is immigration and labor shortages? And is that something that you're experiencing right now? What kind of wage growth are you seeing? Are you seeing shortages of available labor? We're coming up to the holiday seasons. Is that a season?

Is that an issue now?

It has been much less of an issue this year and that's a good sign for us, but not a good.

Sign for the economy.

So I do think there is some weakening and we find it easier than in previous years to get labor for the peak season, be that in Germany, be that across Europe. I think structurally Germany has changed some things in terms of legislation to enable more regular immigration, immigration based on merits. So we think that this is a good thing, but it still needs to filter through. There's a lot of bureaucracy around that as well. Be a big topic in Germany and Europe anyway, there's.

Too much bureaucracy in Germany. I'm sure you've got to say. The answer is yes, But how big a problem is it just to put you deal.

With it at the co face every day?

Yeah, and you know every piece of it is bearable, There's no doubt of it. If you take a single law and say why can a large company not do that, that's a good argument. But if you look at the breath that what we have built up over the last twenty years, you know, it's like a little stone put in your backpack every day and if you do that for a long time, it just gets very.

Heavy, Tobi.

So I'm going to put you on the spot twenty seconds if you can. DHL prides itself on being the first in a certain conflict zone and perhaps the last to leave. Are you positioning around the resolutions in the Middle East.

Well, we operate in different countries around the world. We operate across also geopolitical borders.

And will continue to do that.

We need to work with local governments to enable that, so that's what we continue to do. We're going to be present in those markets. We stick by the policy that you mentioned. We want to be the first in last out to support our customers, to support these economies, to participate in the benefits of global trade.

So that's what we've tried to do.

All right, you heard it here DHL Group CEO Tobisemeyer joining us around the table. This is Bloomberg